Friday, March 14, 2008

Commentary on Bear Stearns 3:30 EDT (BSC)

Good sleep might be the most precious commodity this weekend with one of the primary dealers caught swimming naked in the receding tide. This is the biggest challenge ever faced by the Plunge Protection Team.

Below we provide a chart of the current market capitalizations of the major banks and brokers. As shown, BSC is now down to $4.5 billion. Lehman's (LEH) market cap is currently at $21.7 billion and Merrill Lynch's (MER) is at $43.4 billion.

That point was driven home yet again on Friday as Bear Stearns shares plunged after the investment bank revealed that it’s suffering from something akin to a run on the bank. To think that it was only a week ago that Citic Securities, the state-run Chinese brokerage, said it was in talks to raise its stake in Bear.